Linc Energy doesn't maintain a permanent office at its site near Wright. This trailer is among the only signs of its presence.

Stephanie Joyce

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Millions of railcars leave the Powder River Basin every year, carrying hundreds of millions of tons of coal. Those are big numbers, but the coal we mine is just a small fraction of what’s underground. Most of the basin’s coal reserves are buried too deep for conventional mining.

An Australian company called Linc Energy wants to use a technology known as underground coal gasification to tap those deep coal reserves and turn them into fuel. But as Wyoming Public Radio’s Stephanie Joyce reports, that might come at the peril of another valuable resource: water.

STEPHANIE JOYCE: At the proposed Linc Energy test site just west of the town Wright, there’s no evidence of an abundance of coal.

“So I’m out here at the site that Linc Energy is proposing to develop for underground coal gasification. No one from the company was able to accompany me out here today, but they said I was welcome to look around. It looks like at this particular spot there are five monitoring wells, there’s a pipeline running through the area, there’s a couple of oil wells, I see a herd of antelope running away from me in the distance…that’s about it.”

But buried a thousand feet underground, well out of reach of the big shovels that claw coal out of the nearby surface mines, is a different seam of the same rock. In an interview last fall, Linc Energy’s Brian Deurloo explained that the company wants to extract it by lighting the coal seam on fire.

BRIAN DEURLOO: Then we begin to inject air and oxygen, into the gasification cavity. The coal gets up to 1800 degrees Fahrenheit and instantly turns the solid coal into a gas.

JOYCE: Those gases can then be combined to create diesel, jet fuel and gasoline. It’s not a new technology. Underground coal gasification was first pioneered in the late 1800s and was tested in the United States during the 1970s oil crisis. But outside of the former Soviet Union, it’s never been developed commercially. That might be changing though. As we increasingly search for energy in novel places, interest in underground coal gasification is growing, with test projects underway in China and Australia, and planned for the United Kingdom, and of course, Wyoming. For Peter Wold, that’s exciting.

PETER WOLD: This technology will open up that 95 percent that surface mining can’t get to, and it creates an opportunity for the United States to be energy independent. The potential here is phenomenal.

JOYCE: Wold keeps an eye on these things. He helps run his family’s energy company and his father sold Linc some of the 180,000 acres of coal leases it now owns in the Powder River Basin. Wold even visited the company’s test project in Australia a few years ago.

WOLD: It’s a beautiful facility. I was blown away at how well they’ve done it. You would not know what was going on down there. And it’s in a relatively small area, because the energy that’s produced from that coal is really intense.

JOYCE: That’s another argument for this technology -- if done right, it has a minimal footprint on the surface. But similarly to other new, unconventional energy technologies, like fracking, underground coal gasification is not without controversy.

MIKE MOORE: Water is by far our most important resource in this state.

JOYCE: That’s Mike Moore. He owns property on two sides of Linc Energy’s proposed test site, and he’s worried about the potential for groundwater contamination. In the Powder River Basin the coal seams are aquifers. Linc wants to burn a very small section of the Fort Union aquifer. Gasifying it will produce pollution and although Moore’s water wells are much shallower than the seam Linc wants to burn, he’s worried the water from their project could migrate.

MOORE: There’s no guarantee that you’re not going to pollute everything.

A number of past test projects have shown that when done properly, the toxins can be contained around the seam and cleaned up when the coal has been used up. But a handful of other projects have left behind considerable contamination and required costly cleanups. Moore simply doesn’t think it’s worth risking the water.

MOORE: I think it’s experimental, so I’m very concerned with it.

JOYCE: He’s not the only one. Ranchers on the other side of the world are concerned as well. The Australian government recently filed criminal charges against Linc for allegedly causing “serious environmental harm” at its facility there. It hasn’t elaborated on those charges, but says area wells aren’t in danger. The mayor of a nearby town told Australia’s public broadcaster, ABC, he still has questions:

RAY BROWN: What issues does that come about? Is it just solely where there could be a gas leakage? Or there could there be leakage into other underground aquifers?

JOYCE: So far, answers haven’t been forthcoming. The Wyoming Department of Environmental Quality has requested more information about the allegations from the Australian government, but a department spokesperson couldn’t say how it would be used. The state has already granted Linc a research and development permit for its project near Wright, but the company is still waiting on a requested exemption from the Safe Drinking Water Act, which will have to be approved by the federal government.

That exemption will be a test of whether fire and water can mix in the West. If successful, the technology could unleash vast energy resources and bring about the elusive goal of energy independence, but for now, questions are likely to persist about what we’re giving up in exchange.